Northern Bear – I set a new Target Price of 135p, shares 108p, Interims due within the month

Mark Watson-Mitchell
7 hours ago
3 min read

Mark Watson-Mitchell - 24.10.2025

Two weeks ago the shares of Northern Bear (LON:NTBR) reached 118p, following positive investor reaction to the building services group issuing a Trading Update just a few days earlier, lifting them from trading at around the 98.50p level.

After hitting the highest point since December 2007, the group’s shares have subsequently drifted back to the current 108p, at which investors should now look to take a medium-term view on this very interesting £15m-capitalised tiddler.

The Business

The Newcastle upon Tyne-based group was listed in 2006, consists of nine wholly owned specialist building service providers in the North of the UK, primarily in the North-East and Yorkshire and mainly serving public-sector customers.

Projects are mostly for existing buildings and typically completed within weeks or months.

The group reports in three segments: Roofing (42% of sales in FY25), Specialist Building Services (53%) and Materials Handling (5%) which is a forklift/truck reseller and leasing company.

Its corporate strategy is to seek to achieve organic growth and through bolt-on earnings accretive acquisitions.

Trading Update

On Wednesday, 1^st October, the group reported that it was currently trading ahead of expectations since the preliminary results on 15^th July.

It stated that the full-year EBIT for FY26 is expected to be broadly consistent with the Adjusted FY25 EBIT.

The company also reported a non-recurring operating profit of approximately £1.0m.

That profit enabled the group to fully repay its outstanding term debt of £1.275m related to the Tender Offer settled on 8^th December 2023.

Excluding the non-recurring profit, the Board declared that it expects EBIT for the year to end-March 2026, to be broadly in line with Adjusted FY25 EBIT.

It also stated that it looks forward to providing a further update at the time of the Interim Results in late November.

The Equity

There are some 13.75m shares in issue.

The largest holding is for Nicholas Beaumont-Dark and his family (26.4%), Steve Roberts (5.9%), Keith Soulsby and family (4.1%), and David Jay (4.1%).

Analyst’s View

At Hybridan, the group’s brokers, their analyst Jon Levinson considered that the ungeared balance sheet, net cash, and strong cash flow should support the group’s accelerated capital investment.

His estimates for the current year to end-March 2026, look for sales of £88.0m (£78.1m), with pre-tax profits of £3.63m (£3.05m), generating earnings of 19.8p (16.8p) and paying out a dividend of 2.5p per share.

For the 2027 year, he goes for £90.0m sales, £3.85m profits, 21.0p earnings and a 2.75p dividend.

His conclusion on the company is that:

“The historic P/E of 5.4x looking into 2027 on our forecasts suggests a prospective P/E of 4.5x which seems an attractive valuation given the cash for expansion and the progressive dividend policy.

As the Company invests in upvaluing its services, and the margins improve, the P/E ratio should be nearer the Construction Services sector average of 13.6x.”

My View

No doubt we will see some updated estimates when the group announces its Interim Results within the next month or so.

In the meantime, the shares, now at 108p, offer some really quite appealing upside.

I now set a new Target Price of 135p for the shares.